Total line-haul costs are the expenses associated with the transportation of goods over long distances and vary directly with the distance shipped. Here’s how:
Distance Dependency: As the distance between the origin and the destination increases, the cost of transportation proportionally increases due to fuel consumption, driver wages, and vehicle maintenance.
Fixed and Variable Costs: While there are fixed costs involved in line-haul transportation, such as loading and unloading, the variable costs increase directly with the distance traveled.
Economies of Scale: Though longer distances can benefit from economies of scale, the overall cost will still rise with increased distance.
Freight Rates: Transportation companies typically set their freight rates based on distance brackets, making the cost calculation straightforward for longer hauls. Understanding that total line-haul costs are distance-dependent helps in planning and optimizing transportation routes effectively.References
"Transportation Cost Analysis" - Transport Economics Journal
"Logistics and Supply Chain Transportation Costs" - Journal of Business Logistics
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